Banks open to hiring IIT, IIM graduates

If public sector banks are allowed to recruit talent from premier institutes like the Indian Institute of Technology and Indian Institute of Management, will they find enough takers? Apparently, the answer is yes!

Public sector banks will, however, have to think out-of-the box to recruit candidates who think likewise.

According to Mohak Mehta, Placement Manager, IIT, Bombay, “There are a lot of gaps in the public sector’s understanding of recruitment at IITs…if they reach out to us at the campus there will surely be at least some takers.”

State Bank of India Chairperson Arundhati Bhattacharya first mooted the idea of public sector banks hiring from IITs/IIMs at the two-day banker’s conference (Gyan Sangam) in Pune in early January this year.

Bhattacharya said that if the country spends so much money in educating candidates at such institutes, why should public sector banks not be allowed to hire from IITs and IIMs.

Currently, public sector banks have to advertise for the vacancies and hire talent after a written test followed by an interview. The idea is to give every individual in the country a level-playing field to work with these banks.

Incidentally, in 2013, State Bank of India, in reply to its advertisement for bank probationary officers, ended up receiving 17 lakh applications for a mere 1,500 vacancies.

In other words, such a rigorous selection process would ensure, at least theoretically, that only the crème-de-la-crème land up jobs with public sector banks.

However, public sector bankers argue that by keeping them from recruiting from IITs and IIMs places them at a disadvantage compared to private sector peers and foreign banks.

Vijayalakshmi R Iyer, Chairperson and Managing Director, Bank of India, said, “I don’t get the level playing field as compared to the private players (when I am not allowed to hire from these institutions).”

However, the question is will students be interested if public sector banks come knocking given that the pay scales offered by these banks are lower than what is offered to the students graduating out of these institutions.

According to IIT-Bombay’s Mehta, “Pay packages are over-hyped in IITs. The median annual salary packages last year was around ₹8.3 lakh.”

Incidentally, State Bank of India in its advertisement says that the annual package of a probationary officer joining the bank will be about ₹8 lakh in Mumbai. This includes the expenses incurred by the banks towards housing and the bank has estimated the market value of its accommodation at upwards of ₹3.4 lakh annually.

Other banks pay slightly lower, but according to Mehta the thinking in PSBs to recruit from IITs/IIMs is a “welcome move” as there are some students at the institute, who are looking at such opportunities.

An official from IIM-Calcutta said that they do have students who are willing to work in the public sector at some point in their career.

Vignesh Ramachandran, a second year student at IIM Calcutta, added, “Yes, many students at the IIMs would definitely look forward to working in public sector banks, if the salaries provided by them are on par with average salaries provided by the private sector.

“However, retention of talent might be a problem as the appraisal and promotion norms followed by the government banks are not likely to be similar to private sector firms in the industry. The working environment and peer group inside the government banks might also be something that students want to look at.”

Bankers seem to be seized of some of these issues. So, they might look to place these students in middle-management roles straight out of college.

Bank of India’s Iyer said, “I cannot pay as much as private sector banks, but I can place such candidates at a higher level. For example, we can place candidates at scale — III, where there are four increments in that level…I can place them at a higher scale.”

Bhattacharya, who mooted this first, said, “Should we be allowed to recruit from such institutions, we will take a call at which level we can fit them in. At PO level, it may not be possible on account of compensation.”

(With inputs from Beena Parmar)